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Digital payments are a critical on-ramp for people around the world to access increasingly digitized public and private services. In many countries, digital payment use has expanded rapidly over the past decade—especially in the wake of Covid-19—as consumers and businesses have migrated online and grown used to the convenience, speed, security, and transparency of paying digitally. Mass adoption of digital payments has created powerful network effects that enable ubiquitous person-to-person transactions and dramatically expand the markets for small businesses. The digital payment revolution has also helped create the financial technology (fintech) and e-commerce revolutions that fuel consumption and promote income growth.
Countries around the world have promoted digital payments and financial inclusion through various means, including through digital public infrastructures (DPIs)—a relatively new term that usually refers to digital identity, payments, and data exchange systems on which other digital solutions and services can be built, typically to promote financial and digital inclusion. In 2023, the G20 envisioned DPIs as “interoperable, open, and inclusive systems supported by technology to provide essential, society-wide, public and private services” that can play “a critical role in accelerating digital transformation in an inclusive way.”1
Estimates suggest that over 100 countries—possibly as many as 130—have at least one DPI element in place; many more are considering DPIs. However, as discussed in a recent paper published by the Center for Strategic and International Studies (CSIS), there remains little knowledge about DPIs’ functioning and impact, for example on digital payment adoption and use, financial inclusion, consumer choice, and economic productivity. In addition, debate has only begun on the optimal DPI designs that would promote payments adoption and economic and inclusion gains. For example, while DPIs are often thought of as being led by the government, the degree of “public” in national digital identity and payment infrastructures varies widely across countries. Indeed, in many countries with broad-based adoption of digital payments, the private sector has led the way in enabling payments and even digital identity systems, with the government creating an enabling environment for digitization and ensuring competitive and open markets for all participants.
In many countries with broad-based adoption of digital payments, the private sector has led the way in enabling payments and even digital identity systems, with the government creating an enabling environment for digitization and ensuring competitive and open markets for all participants.
The purpose of this paper is to help bridge the knowledge gaps about DPI designs and their impact by highlighting Kazakhstan’s digital transformation journey. The Kazakh case merits attention for several reasons: the percentage of the population using online banking has risen from a quarter of the population in 2018 to nearly 100 percent in 2024; digital transactions have increased from 7 percent of all transactions in 2014 to 89 percent in 2024; and public services and government transfers and transactions are nearly fully digitized, in part thanks to the government’s partnerships with banks. Over 90 percent of the economically active population uses the eGov platform. In addition, digital transactions soared from about $20 per capita in 2014 to $13,800 in 2023. As payments have digitized, the Kazakh fintech and e-commerce ecosystems have boomed and diversified rapidly.
Though Kazakhstan’s swift digital transformation has not been widely discussed, it offers valuable lessons to the many developing and emerging markets that are considering DPIs and contemplating the design of their digital transformation journeys. In particular, the Kazakh model highlights the importance both of private sector leadership in digital transformation and of public policies that promote competition and level playing fields in digital payment offerings. This paper highlights several policies and design choices that have contributed to Kazakhstan’s success, including the following:
This paper discusses the features of Kazakh DPIs and the policies behind them, drawing comparisons with nine other economies with diverse digital transformation experiences and DPI journeys—Brazil, Estonia, India, Peru, Singapore, Sweden, Thailand, Turkey, and the United Kingdom. Each country has designed and sequenced their digital transformation initiatives differently, but collectively, their experiences offer generalizable policy lessons to countries building their own digital public infrastructures.
The following section explores the Kazakh digital transformation, focusing on the outcomes in digital ID and payment adoption and the use and expansion of financial innovation and e-commerce. The third section analyzes the policy playbook behind Kazakhstan’s progress, and the final section offers a conclusion.
If you spent a day as a Kazakh business owner traveling for meetings from Almaty to Astana, shopping and running errands on the way, you would not need more than your smartphone. A single day might run as follows. You head for a coffee shop in Almaty in the morning and pay for your cappuccino with your phone via a QR code. While enjoying your coffee, you book and pay for your train ticket via a superapp. Later, heading for lunch between meetings, you remember to transfer a micro payment to your friend for the evening’s movie tickets. Then you decide to celebrate the morning’s successful meetings by finally buying your dream motorbike on one of the many local e-commerce marketplaces, paying for it with a buy-now-pay-later app. Before heading out for your next meetings, you use your biometrics to authenticate yourself with an e-government or bank app and register the motorbike with the government. As you return home on the train at the end of the day, you decide to apply for a digital mortgage for your new house, which you do by authenticating yourself with your biometric digital ID. Finally, as you finish your train ride, you get back to work, using Kazakh fintech apps to prepare invoices and run the month’s payroll.
This day in a Kazakh’s life parallels others in advanced economies. Yet it remains a distant prospect in many emerging and developing nations: on average 1.4 billion people in the world do not have access to even the most basic digital payments, and hundreds of millions of others have only basic transactional accounts without access to other financial services such as lending, and only partial digital access to government services.
Yet the Kazakh-style “digital everything” economy is not out of reach. Only 15 years ago, fewer than a third of Kazakhs used the internet and fewer than a fifth used digital payments.2 Much like in other rapidly digitizing emerging markets such as Turkey, Thailand, and Peru, Kazakhstan’s rapid digital transformation journey is the product of intentional steps aimed at building a customer-centric, open, and competitive digital economy (See Case 1). The Kazakh government and the National Bank of Kazakhstan (NBK) have worked closely with the country’s banks and private sector to make strategic investments in digital and payment infrastructures, to develop regulatory frameworks and policies conducive to open and competitive payments markets, and to promote financial innovation and fintech and e-commerce ecosystems. The following discussion examines the Kazakh DPIs and the policy playbook that helped birth them.
Digital ID
Digital payments
Data exchange and e-government
Promoting Ubiquitous Identity, Access, and Payments
Digital identity is one of the cornerstones of today’s digitizing economies. According to the World Bank, 186 out of 198 countries and around 7.35 billion people have some type of digital ID. In Estonia, India, Sweden, and the United Kingdom, digital IDs are nearly universally adopted (see Figure 1). Digital IDs are not always created by governments. For example, in Nordic countries ID systems were started by banks. The Swedish Bank ID is particularly widely used, with 1.8 weekly uses per capita.
There are many benefits to using digital identities, including dramatically lowering the cost of verifying people’s identities; promoting access to public services; facilitating payments across the financial ecosystem; enabling users to gain access to financial services; and promoting economic efficiencies. One frequently cited example is Estonia’s e-ID—specifically the use of digital signatures—which helps Estonians to save five full workdays each year. In Kazakhstan, there are two ways to identify and authenticate individuals based on a biometric digital ID, one for e-government services and another for financial services.3 Almost all second-tier banks and a significant number of non-banking financial organizations (e.g., 75 payment, microfinance, and other financial organizations) are connected to the digital biometric identification system. Using these systems, Kazakhs can easily authenticate themselves and thereby access e-government services, make a payment, open a bank account, order a credit card, and even apply for a loan or digital mortgage. The use of the ID has grown rapidly, from 592,000 monthly uses in 2021 to 2.4 million in 2024.
Another DPI layer is digital payment, with over 100 countries having adopted some type of instant payment system. Instant payment systems—or a real time account-to-account money movement infrastructure—often are discussed as DPIs and as a prerequisite for financial inclusion. However, many countries have digitized payments through coexisting and competing payment platforms, and often before instant payment systems have been introduced. Indeed, survey data compiled by the Nextrade Group strongly indicates that instant payments typically gain traction among individuals and merchants that are already using digital payments and cards. Moreover, the use of instant payments has taken off in such economies as Brazil, Singapore, Sweden, and Thailand, which had strong digital payment adoption rates and network effects already in place before instant payment systems were introduced.4 In contrast, in economies such as Mexico and India, where digital payment use has been more limited, the adoption of instant payments has been slower. This is also reflected in transactions per capita—by the end of the third quarter of 2023, Thailand’s instant payment system PromptPay surpassed 30 transactions per capita per month, while Brazil’s Pix had 25 transactions per capita per month, India’s UPI had 10 monthly transactions per capita, and Mexico’s CoDi even fewer than that.
Instant payment systems are built by both public and private entities. For example, while Brazil’s Pix and India’s UPI are government led, in many other countries instant payment systems are led by the private sector or through public-private partnerships. Sweden’s popular Swish instant payment system—used by 82 percent of Swedes—was developed through a partnership between major Swedish banks and the Riksbank (the Swedish central bank) and is operated by four leading banks. The United Kingdom’s instant payment system—the Faster Payment System—is operated by a consortium of major banks and fintech companies under the regulation of the Bank of England. Singapore’s instant payment system FAST (with mobile alias PayNow) is owned by the Association of Banks of Singapore and overseen by the Monetary Authority of Singapore (MAS). Public-private partnerships created Thailand’s PromptPay.
In Kazakhstan, NBK launched its Instant Payment System (IPS) in June 2022. Critically, it was launched only after bank-led solutions, such as the Kaspi digital wallet, had already gained a dominant share of the domestic payments market and thus promoted financial inclusion. NBK is also working on a unified QR code to facilitate payments between banks, further stimulate the development of mobile and online payments, and promote financial inclusion through better access to data on underserved populations. As part of the “national digital financial infrastructure,” the national QR code enabled 2.1 billion transactions in the first eight months of 2024. This is rather remarkable: the QR code was not even included in payment statistics as a separate line item the year prior.
As a result of its increasingly ubiquitous digital IDs and payment systems, Kazakhstan has quickly increased the share of digital payments to 89 percent in 2024, closing the gap with Sweden and Singapore, where 98 percent and 97 percent of payments are digital, respectively (see Figure 1). Retail commerce activities have rapidly digitized as well. In the first half of 2024, the share of payments for goods and services made through the internet and mobile banking applications was 62 percent, up from 47 percent in 2023. Compared to other emerging markets, Kazakhstan’s journey has paralleled and, in some ways, surpassed Brazil’s, where digital payments doubled from 35 percent to 70 percent of all payments in 2014–2023.
Building on Digital ID and Payments: E-government, E-commerce, and Fintech Ecosystems
Countries around the world have translated their DPI investments—digital ID, payments, and data exchange—into e-government services, e-commerce uses, and fintech ecosystems.
Of the economies included in Figure 1, Brazil, Singapore, and Sweden have made strong gains in e-government services. Sweden’s BankID offers users access to 6,150 businesses, agencies, and organizations, while Singapore’s Singpass unlocks 2,700 services from 800 government agencies as well as numerous businesses. Brazil’s Gov.br platform enables access to a wide range of public and private services, including at state and municipal levels.
In Kazakhstan, DPI investments have opened up access to government services and financial transfers. The Kazakh e-government system has digitized 90 percent of all public services, and over 90 percent of the economically active population uses the eGov.kz platform. Its omnichannel model means that Kazakhs can access the e-government services through the eGov.kz portal and an app, as well as through the banking apps of leading banks that enable their customers to transact with the government (see Case 2). As of 2021, more than 7 million Kazakhs—about half of the adult population—accessed the public services section via the superapp Kaspi.kz, including digitally registering a third of the vehicles in the country. The new eGov mobile app is expected to compound these gains by enabling users to access public services and digital documents through their biometric IDs on personal phones. The e-government system has lifted Kazakhstan into the top 30 in the UN e-government index, along with Estonia, Singapore, Sweden, and the United Kingdom (Figure 2). India, Brazil, Peru, Thailand, and Turkey lag further behind.
Kazakhstan has seen significant growth in the adoption of digital banking services in recent years. The major banks in the country have developed sophisticated mobile applications to cater to the needs of their customers, including government services such as tax payments and car registration.
Each bank decides which government services should be included in its app depending on its own strategy and customer needs, while the government provides a single window for approvals through a “Digital Bridge.”
Banks see the e-government service as another means of promoting their own customer service and building a competitive advantage. Popular banking apps that also offer e-government services include the following:
Digital IDs and payments have promoted e-commerce around the world. Especially during the Covid-19 shutdowns, consumers grew to prefer the convenience and security of remote digital payments over cash-on-delivery practices. As a result, e-commerce has grown to be a prominent part of national economies—as much as 44 percent of retail sales in South Korea, 35 percent in the United Kingdom, and 17 percent in Singapore are made online. In Kazakhstan, e-commerce has grown explosively from 1.4 percent of retail transactions in 2018 to 13.1 percent in 2023, similar levels as in Thailand and Brazil, two more established and dynamic e-commerce markets. Sales (or gross merchandise value) on the country’s leading e-commerce platform—the Kaspi.kz marketplace—via a superapp that also brings together e-travel, e-grocery, and transportation services, and micro and merchant finance, has grown sixfold in 2019–2023, from $1.6 billion to $9.2 billion.
Furthermore, digital IDs and payments have fueled fintech ecosystems around the world. As of 2024, there are over 30,000 fintechs around the world, with the United States, the United Kingdom, and China leading the way. By promoting financial intermediation, fintechs such as digital lending start-ups have propelled income growth in both advanced and emerging markets. As of 2024, in Kazakhstan there are around 200 fintechs, one per 100,000 Kazakhs, just above the numbers in Brazil, India, and Turkey and up from just 50 fintechs in 2018. The fintech ecosystem is propelled by the country’s leading financial institutions—for example, Kaspi Bank, Halyk Bank, ForteBank, Jusan Bank, Freedom Finance, and others—and is highly diversified, with e-wallets, mobile banking solutions, electronic know-your-customer verification (eKYC), anti-money laundering (AML) solutions, payment processing, invoice management, and many other services, many geared to supporting small and medium enterprises. By 2023, fintechs accounted for some 40 percent of Kazakhstan’s venture-capital deals and raised the equivalent of $4 per capita, matching levels raised annually by fintechs in India in the previous several years.
Digital IDs and payments have fueled fintech ecosystems around the world.
What can countries interested in adopting DPIs and promoting digital payments learn from the 10 countries examined here, each with somewhat distinct DPI journeys, and from the Kazakh case in particular?
Overall, there are at least seven fundamentals, all of them in the Kazakh policy playbook and to varying degrees also present in the other countries’ transformations (see Table 2).
These success drivers related to the deployment, maintenance, and governance of DPIs were echoed in the G20’s 2023 position paper on DPIs, which emphasized three elements for DPI development: enabling financial and digital infrastructures, such as mobile penetration and broadband connectivity; providing ancillary government support systems, such as government-to-person (G2P) digital payments; and creating conducive legal and regulatory frameworks, such as data protection and privacy laws.
In the Nextrade Group’s 2023 analysis of 15 policies within these three dimensions across 190 economies, there are significant variations in DPI readiness—Kazakhstan ranks 51st out of 190 countries, while many economies aspiring for DPIs, for example in sub-Saharan Africa, still fare quite poorly, indicating the need for much more fundamental work prior to the introduction of DPIs.
Granted, all economies—even the most advanced, with solid enabling environments for DPIs—face challenges in their digital transformation journey. One major challenge is cybersecurity, where the threat environment evolves quickly with technological advancements. Another is ensuring DPIs contribute to cross-border payments in a world where companies and consumers around the world habitually use e-commerce to transact across borders. In addition, DPIs’ business models and sustainability remain question marks in markets such as India where governments subsidize DPIs. This paper has shown that many other countries have opted for market-led digital transformations and succeeded, through private sector solutions, at creating ubiquitous and inclusive digital payments ecosystems, governments policies promoting level playing fields, competition, and solid policy-enabling environments. For the international community analyzing and promoting DPIs in developing nations, there is a great need for clear common definitions of DPIs, and for rigorous measurement of DPIs’ usage, functioning, and development results.
Payments have digitized around the world, yet considerable gaps remain—some 1.4 billion people have yet to use any digital payments. Typically, technology is not the challenge; rather, the challenge lies in the adoption and implementation of policies and practices conducive to digital payments’ adoption and use.
This paper has reviewed Kazakhstan’s journey digitizing transactions across the population and building robust e-commerce and financial services ecosystems that are increasingly universally used by Kazakhs in their daily lives. At a time when many governments look to instant payments, Kazakhstan’s example shows that an impactful and inclusive digital payment infrastructure can be developed by enabling multiple and competing payment solutions.
Several policies and design choices have contributed to Kazakhstan’s success, such as their focus on the adoption of policies and regulations that have enabled an open, competitive, and innovative payment infrastructure conducive to consumer choice, and public-private partnerships to promote digital transactions and e-government services and financial transfers.
These policy moves in Kazakhstan have created an economy where nine out of ten payments are digitized, where businesses have shifted to selling online, and where consumers use their phones almost daily to shop online, pay for goods and services, secure loans, access public services, and transact with the government.
While Kazakhstan’s specific digital infrastructure design features and diffusion strategies may not always travel across markets, these policy principles do. They provide useful guidance for the many emerging and developing nations that are seeking to build their own tech stacks to promote digital transactions, financial inclusion, and an ecosystem of fintechs and services that in turn increase their economies’ productivity and incomes.
Kati Suominen is an adjunct fellow (non-resident) with the Economics Program and Scholl Chair for International Business at the Center for Strategic and International Studies in Washington, D.C.
This report was made possible through generous support from Visa Inc.
Please consult the PDF for references and tables with more information on digital public infrastructure elements and policies across countries.